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I see the appeal. People have causes about which they are incredibly passionate. Or they see a micro need in their community and want to step in to help. Or they want a means to get donations for charity work they are doing already.
Wanting to found a nonprofit organization is a noble, admirable cause.
But is founding a nonprofit really the answer? Sometimes—yes, yes it is. Unfortunately, the answer is usually no.
Statistically, 30% of nonprofits fail within the first ten years of incorporation. Some data even suggest a higher failure rate. This can be for many reasons, the most common of which are 1) lack of funding; 2) lack of support; 3) the service was no longer needed.
Many of the nonprofits that make it still struggle day-to-day, and they never evolve past the start up or administrative life cycles.
So, how do you decide is founding a nonprofit is the right thing to do?
First, you need to ask yourself a few questions:
What is your reason for wanting to found this nonprofit?
Are you wishing to fulfill a hobby or passion project of yours? Or are you actually meeting a true need in your community?
What is that need, and can you justify your proposed service to potential donors, volunteers, and supporters?
Chances are, if you have an idea for a nonprofit, then there already is a need for what you want to do in your community that isn’t being met. Or is it? Which brings me to….
Is the mission you seek to fulfill already being completed by someone else?
If the answer is yes—my sincere wish is that rather than starting a new nonprofit, you find a way to get involved with theirs. Ask them where they need support and if you can volunteer.
Creating a nonprofit to duplicate services diverts resources that are already in high demand.
99% of the time, we don’t need more nonprofit organizations, we need stronger support for the ones that already exist.
Running a nonprofit isn’t just carrying out the service you founded it to do. Overseeing a nonprofit organization calls for behind the scenes work they may go unnoticed by everyone else but which is critical for long-term success.
From writing a business plan to managing board meetings to setting a strategic fundraising plan to creating (and following) a budget, founding and running a nonprofit is not for the faint of heart, or for someone short on time.
Ideally, though you wouldn’t carry out each task alone. Which is why you need to ask…
Many people who wish to found nonprofits do so alone. They get a friend or family member or two to sign on as a “board member” so they can fill out their paperwork when filing as a corporation, but primarily they wear all the hats.
But are you really prepared for the legwork that goes into creating a successful entity? The reality is you need TONS of help.
Who is going to be on your board of directors? Who is going to help write the bylaws and set the foundational structure for your organization? Who is going to run board meetings and take minutes? Who is going to network within the community to gain supporters and raise awareness?
Who is going to set a strategic fundraising plan and follow it? Who is going to plan and execute events?
Who is going to run your website/social media? Who is going to answer phones/emails, send mail, thank donors, and run a database of clients and supporters? Who is going to manage financials, file 990 forms and annual reports, and do the bookkeeping?
And as for your services… who is going to carry them out? Do you need professionals with accreditations and training? Are they going to volunteer their time or will they need to be paid? Who is going to manage the volunteers?
My advice to you is that if you cannot name a person in response to each of those questions, wait until you can. Make sure you are not signing up for everything.
Assemble your team first. Make sure they are as committed as you are. THEN, move forward.
This doesn’t get talked about enough.
Say you have a village – this is fantastic! From the start, you need to make sure they are included in all major decisions and that you are willing to share the load with your team.
Founders do not own a nonprofit organization. Once formed and granted 501(c)(3) status from the IRS, that nonprofit is a public entity and it is not “owned” by any one individual.
Thinking that you “own” a nonprofit or that it is “yours” is a deeply unfortunate and egotistical reality for some people that results in something called “Founder’s syndrome” – a situation in which the organization’s growth is paralyzed because the founder has too much control.
If you are not prepared to share the responsibilities of governing and growing the organization and to allow others to influence its role in your community, you are not ready to found a nonprofit.
Starting a nonprofit doesn’t just take time, it takes money. Ask yourself… how do I plan to fund this while I get it off the ground?
Fundraising takes time and effort. Whether you are soliciting donors, corporate partnerships, or seeking to write grants, every ask requires an investment of time, expertise, and strategic positioning.
In fact, many grants do not accept applications from nonprofits younger than three years old and require several years’ worth of 990s or even audited financial statements from past years—documents you won’t have when you’re just starting out.
Plan to invest a decent amount of money into this venture. Depending on the nature of your services, plan anywhere between a minimum of $2,500 to $10,000 over the first year—and that’s not counting the cost of filing fees required to legally start it.
The more people you bring on this journey with you, the more support you’ll have and the earlier you’ll gain momentum.
